State to shut down Vanguarde

Jill Krueger  
South Florida Business Journal
5-17-02

Florida Treasurer and Insurance Commissioner Tom Gallagher demanded earlier this week that Vanguarde Asset Group, an unauthorized health insurance entity, be shut down. The company also is known as Vanguard Asset Group, a privately held health care company headquartered in Lake Success, N.Y.

State insurance regulators don't yet know how many Floridians bought products from the insurance company. Vanguarde is the sixth unauthorized health insurance entity Gallagher has ordered to cease operations in the state.

Last month, the department debuted a media campaign that warns consumers not to buy insurance from unlicensed entities. The department said such insurers don't take part in a state fund to covers unpaid claims if a licensed insurer goes bankrupt. Further, those who buy unlicensed health plans may have trouble getting new coverage due to pre-existing conditions and a break in coverage.

Although in certain instances an employer can set up a health plan for its own employees without a state license, the department alleges Vanguarde offered coverage to unrelated employers and consumers, in violation of state law.

The department's order mandates that Vanguarde give notice in writing to every policyholder and beneficiary that they need new health insurance coverage. It further requires every agent and broker who sold Vanguarde's products to offer to place each policyholder in a comparable plan from a Florida-licensed insurer or HMO. Vanguarde also must continue paying claims.